Few bankers would include the fact that they were once a scout on their CV, “as a joke”. But Peter Luthy is not, perhaps, an ordinary banker. A fit-looking and apparently easy-going 46, he gives off a convincing sense of having squeezed the most out of life. He spent two years in his early 20s working as an idealistic carpenter in New Jersey and another two in his late 30s as a wealthy non-worker, travelling the world with his milliner wife Candace and skiing wherever the opportunity arose – 100 days a year.
Now he’s back where he says he’s happiest of all. “I realized that everything else is boring compared to this industry. This is by far the most exciting thing you can do.”
So that he never feels isolated from the buzz, he has had his office door at Dresdner Kleinwort Benson (DKB) removed, and jammed the levers on his privacy blind so that he cannot close it. “People want to talk. They want to feel they’re being listened to. Most of the time it’s business related, but you don’t limit people.” He likes the open door, but he hates meetings.
“Meetings are the death of this business. Aren’t you cold? We keep the meeting rooms cold to stop people spending too much time in them.”
Luthy’s present job started a year ago, after he and his partners at Luthy Baillie Dowsett Pethick & Co sold out to DKB. That firm did credit research and bond execution for institutional accounts. “Our problem was we were not investing our capital, we were acting as a broker, and it’s difficult to make money as a broker when everyone else is investing their capital. Although we had great client relationships we weren’t making a lot of money. And by this time I realized I didn’t have all the money I needed.”
Luthy oversees new issues and secondary trading for non-government bonds. Government bonds are done out of Frankfurt in line with DKB’s policy of “focused decentralization”. “They put the head of the business in the location where they think most skills are,” says Luthy.
His aim is to “bring capital market skills to the bank’s corporate lending relationships”, leveraging Dresdner Bank’s franchises in Latin America, eastern Europe and the US. “My hypothesis is that the bank market and the bond market will blend together. . . . Banks will want to manage their portfolios and originators want to distribute their risk. The bank loan market will start to trade with much more liquidity – you’ve seen it start to happen with Eurotunnel’s distressed debt.” Last autumn, Luthy and his team took advantage of an existing relationship to do a $300 million Eurobond for Tatneft – the first Eurobond for a Russian corporation.
Born in New Jersey in 1951 to Swiss American parents, Luthy spent much of his youth travelling between the US and Europe: his father worked for a Swiss company. He read economics at Dartmouth College but didn’t do too well. He became a carpenter. “This was 1973, the time you did alternative lifestyle studies. I saw my future as having a trailer home with a big screen colour television and a pair of matching his and hers 440 Yamaha snowmobiles outside. But then I got married and I decided that wasn’t good enough.” So after two years he packed in the carpentry and went to Columbia to do an MBA. His wife supported him by working as a bartender.
In 1977, Luthy was hired as a bond salesman by First Boston in New York. While in London for three months’ training in international markets, the bank merged its European business with Credit Suisse White Weld. He stayed there. “I never did want to go back either. I always wanted to do something internationally.”
By 1980 Luthy was managing director of CSFB (Asia) in Singapore, trading Asian CDs and international bonds. In 1981 he returned to London as the syndicate manager, reporting to Hans-Joerg Rudloff. The Eurobond markets were just taking off and CSFB was the dominant force in new issues.
The following year he and several others from CSFB joined Lehman Brothers. “It was a tremendous opportunity,” he explains. “Lehman was a peanut little shop. It had 18 people on its trading floor. When I left there were 1,500 people in the firm.” During his time at Lehman, Luthy set up and managed the financing department (syndicate, financing, private placements, swaps and equity new issues). After becoming a managing director in 1984, he established and co-ordinated the Shearson Lehman Hutton banks in Paris and Frankfurt and subsidiaries in Geneva and Milan.
By 37, however, Luthy decided that he was “kind of depressed by the industry”. He had “what I thought was a ton of money” and so resolved to take some time out. “I got to the point where people didn’t want to see me be-cause I kept telling them where I’d just been,” he recalls of his 21 months free-wheeling.
Although now back in the business, working eight until eight, he still fits in 30 days skiing a year – including a week in the Alaskan wilderness in the company of Doug Coombes, winner of the World Extreme Skiing championships – and regularly goes to rock concerts. Hardly surprising, then, that his eldest daughter, although studying biochemistry at university, wants to become a banker. Philip Eade
